"WASHINGTON - The Obama administration announced Thursday it will consider alternative routes for the Keystone XL oil pipeline to avoid ecologically sensitive areas of America's heartland - delaying a final decision on the controversial project until after the 2012 election.

The move eases a political dilemma for President Barack Obama, who faced competing pressures from industry, labor and environmental interests in weighing whether to permit the 1,700-mile pipeline that would carry Canadian oil sands crude from Alberta to Port Arthur.

"Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood," Obama said in a statement.

Focus on 'only 1 job'?

Oil industry leaders accused the White House of playing politics by courting Obama's environmental base at the expense of potentially thousands of construction jobs.

"This is clearly about politics and keeping a radical constituency opposed to any and all oil and gas development in the president's camp in 2012," said Jack Gerard, president of the American Petroleum Institute. "It appears there is only one job that is being focused on here."

Because the pipeline would cross the U.S.-Canada border, the State Department had been weighing whether the $7 billion project was in the national interest.

Obama had signaled he would be involved in a final decision, but Assistant Secretary of State Kerri-Ann Jones dismissed the charge that politics played a role in the delay.

"This is not a political decision," Jones said. "The White House did not have anything to do with this decision."

Nebraska seeks change

The State Department said it would examine routes that would avoid the Sandhills in Nebraska, after residents warned about possible spills that could taint the Ogallala Aquifer, which provides drinking water for 2 million people.

Nebraska's legislature just convened a special session examining ways to force an alternative path.

The administration looked at 14 different route options as part of a broad environmental review of the pipeline, but Jones said those alternatives did not include any that avoided the Sandhills while still traversing Nebraska.

The administration estimated it will take until at least early 2013 to complete required environmental reviews of a new pipeline path.

TransCanada Corp., which first sought approval for the project three years ago, said it will continue seeking a permit.

"We remain confident Keystone XL will ultimately be approved," said TransCanada CEO Russ Girling. But he said that may come too late for refiners who are counting on crude carried by Keystone XL.

"Supplies of heavy crude from Venezuela and Mexico to U.S. refineries will soon end," Girling said in a statement. "If Keystone XL is continually delayed, these refiners may have to look for other ways of getting the oil they need. Oil sands producers face the same dilemma - how to get their crude oil to the Gulf Coast."

Environmentalists have argued that approving Keystone XL would make the U.S. more dependent on a form of bituminous crude, which is harvested from Alberta's oil sands and takes more energy to extract than other fossil fuels.

Labor groups see jobs

But some organized labor groups said that Keystone XL could provide jobs for thousands of pipefitters and other construction workers.

Oil industry advocates argued that the pipeline would provide the United States more crude from a North American ally while providing a new route to Texas refineries for oil from the Bakken shale in Montana.

San Antonio-based Valero, the nation's largest independent refiner, called the delay "short-sighted," attributing the decision to "extremists who fail to realize that fossil fuels will continue to be consumed because they are efficient and economically viable."

Rep. Gene Green, D-Houston, who has championed the project, said he was disappointed, saying the pipeline already has survived extensive reviews and could provide thousands of jobs.

Environmentalists cheered the decision just days after thousands of activists circled the White House to protest the pipeline.

"People from all walks of life have been writing the president and coming to the White House saying they're concerned about what a major tar sands project will do to their land and water," said Susan Casey-Lefkowitz, director of the Natural Resources Defense Council's international program."

i can see individuals worrying about that pipeline. After all there is more oi spilled by transporting it than drilling for it. I wouldn't want that thing around my groundwater either.
However I do not like the way Obama is dealing with it...

National interest? Scratch the pipeline and put the $7 Billion in the hands of scientists and inventors to developers alternatives to fossil fuels. People with absolutely no fossil fuel or nuclear interests. And forbid anyone with fossil fuel or nuclear interests from contacting these people in any way. Something tells me alternatives would be found. Something also tells me this will never happen.

I am speaking of the life of a man who knows that the world is not given by his fathers, but borrowed from his children; who has undertaken to cherish it and do it no damage, not because he is duty-bound, but because he loves the world and loves his children… - Wendell Berry, 1971